Proponent Testimony on Substitute House Bill 3 before the Ohio House Economic and Workforce Development Committee

Summary

Proponent testimony on Substitute House Bill 3 submitted on behalf of the Ohio Chamber of Commerce to the Ohio House Economic and Workforce Development Committee, dated March 14, 2023. The testimony states that Ohio has a gap of nearly 255,000 units of affordable and available housing for extremely low-income renters. It describes HB 3 as creating a state tax credit program of up to $500 million per fiscal year for qualified projects, claimed over a ten-year period, that could lead to approximately 4,300 housing units annually. Citing an Ohio Housing Council study, it states the program would create nearly $25 billion in economic activity and over $3 billion in tax revenues. The testimony closes by supporting the bill, and an Appendix A follows.

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OHIO

CHAMBER
of COMMERCE

Before the Ohio House Economic and Workforce Development Committee
Proponent Testimony on House Bill 3

March 14, 2023

Chair Swearingen, Vice Chair Santucci, Ranking Member Upchurch and
members of the Ohio House Economic and Workforce Development Committee,
thank you for the opportunity to provide proponent testimony on Substitute
House Bill 3 (LSC 1_135_ 0648-2) on behalf of the members of the Ohio
Chamber of Commerce.

The Ohio Chamber has become more engaged on the issue of housing in part
because we have heard from our member companies that work force attraction
and retention has become a major issue for them. A component of this issue is
wrapped up in the housing stock issue confronting all communities across
Ohio. This issue is now part of the Ohio Chamber’s Blueprint For Ohio’s
Economic Future - Lever 2 - Sense of Place. Ohio has a housing stock
shortage that grows every year, and this leads to more households being cost
burdened by the homes they reside in. Cost burdened is a household that
spends more than 30% of their income on housing. The lack of housing stock
has created a gap of nearly 255,000 units of affordable and available housing
for extremely low-income renters. See Appendix A attached to this testimony.

HB 3 seeks to address an aspect of the housing shortage with the creation of a
state tax credit program that could lead to the creation of approximately 4,300
housing units annually. This program would begin to stabilize the housing
stock for vulnerable households and open the door to additional federal
resources by leveraging more monies from the current federal low-income
housing tax credit (LIHTC) program.
HB 3 allows state credits of up to $500 million per fiscal year for qualified
projects, and the Director of the Ohio Housing Finance Agency (OHFA) can
reserve these credits until January 1, 2029. Like the federal LIHTC the state
credit is claimed over a ten-year period by eligible investors who receive a
certificate from the Director of OHFA. This credit can be taken against the state
income tax, financial institutions tax or insurance company premiums tax.

While this program requires the state of Ohio to forego potential revenue in the
form of future tax receipts, the economic benefit of this program can be
estimated from both the jobs created in construction payrolls and from the
operation of the properties constructed. According to an economic impact study
released today by the Ohio Housing Council, the program (over the 30-year
depreciated life of the units) will create nearly $25 billion in economic activity
and generate over $3 billion in tax revenues from construction and operations
for local and state governmental entities.

While HB 3 is not a magic potion to fully solve the housing supply issue Ohio
faces, it is an important first step in alleviating the crisis of housing units
needed to move more families out of their current cost-burdened status. HB 3
also starts the process of reducing the nearly 255,000 deficit of housing units
needed for Ohio’s low-income renters. The Ohio Chamber supports the
measure and hope this bill can be referred to the whole House for
consideration.

Thank you for allowing me the opportunity to testify on HB 3 and I will now try
to answer any questions you may have for me.
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